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We're heading into a cooler time of the real estate market as we wrap up the year huddled inside. Let us tell you some stories about the latest trends by the fireside.
We can't believe how quickly the time has turned to October. As the gusts pick up and the days become shorter; the trees are putting on a colorful show before their leaves fall like rain as they dance through the air on a passing breeze. We saw the final Mariners game of the season, went to the Fair, and enjoyed eating our way through the Market on one of our last warm and sunny days of the year. We hope you enjoyed the last few weeks as much as we did!
Heading into the 4th Quarter of 2019
Three quarters of 2019 are in the books and this year is shaping up to be close to neutral for the Seattle-Bellevue area markets. Median values have been stagnant for the past 18 months, not quite touching the top in early ’18. Despite the lack of growth in values, the market remains resilient as demand continues to outpace supply. The current read on inventory is just under 2 months supply, which is still firmly in the sellers’ territory.
Although the last quarter of the year is seasonally the weakest in terms of demand; new inventory generally falls in unison. Our expectation is for prices to continue to consolidate for the next several months into early 2020.
Since the numbers are a bit dull this month, we thought we would discuss some popular trends in housing.
As always, reach out with questions, comments or just to say hello!
Vin & Candice
Life / Work Balance
Several varieties of Live / Work properties have made their market debut in the last few years
Having grown up in the boroughs of New York, I am no stranger to the concept of living above your place of work. I have memories of corner delis, grocers and dry cleaners filling the ground level space of small walk-up apartment buildings. Of course, the Seattle concept looks much different but offers similar opportunities for property owners.
Many builders advertise these listings as “an opportunity to allow your business to blossom” offering a “better work/life balance” or “make some extra income as a landlord.” Most units are located on or near walkable main thoroughfares throughout the city making it feasible to be a café, small retailer or an office that favors foot traffic. They offer ground level access for the commercial unit with a lockout stairway leading to the residential part of the building on the 2nd and 3rd levels. The main part of the building can be accessed through an entrance in the back that opens directly to the stairway.
Although we were skeptical at first, this idea is really starting to accelerate. In addition to multiple new projects coming up for sale, leasing centers are starting to get in on the game. The Huxley in West Seattle now offers 960-1070 square feet 1 bedroom live/work units starting around $2500/month.
Here are few recent listings for these type of properties. Another enclave of 13 live /work units plus 14 town homes was completed in West Seattle's Admiral neighborhood along California Ave in 2017. We've been in a couple of the town home units that have been in the resale market recently. Businesses in the live/work units range from a coffee shop, vintage clothing / housewares, artisan jewelry & small business offices.
Micro-Housing & SEDUs
Although micro-housing is not a nationwide phenomenon, it has become a niche growth model in cities with expensive housing. Originally targeted toward young professionals and college students, this mode of housing has expanded way beyond what we expected.
Our story begins in 2009, when micro-housing appeared in Seattle’s interior neighborhoods. The units were tiny, many under 100 square feet offering a small bath, one or two windows and a shared kitchen and laundry. Despite the dorm like lifestyle, they were popular. The concept gave young professionals an option to live in the city rather than have roommates in the burbs. Production ramped up steeply, and by 2013 they accounted for nearly 25% of Seattle’s housing growth.
The rapid development disrupted neighborhoods and received significant pushback from long time residents. By 2014, King County put a halt to the further development by initiating the stance that all new projects be subject to a thorough design review process. The increased expense pushed builders to scale up to build “Small Efficiency Dwelling Units” (SEDU) instead, which didn’t require such extensive reviews. Unlike micro-apartments, SEDUs must have at least 220 square feet of floor space and provide a private kitchen. And so, the next round of development took place.
Today’s SEDUs average about $1250/month which is substantially cheaper than the average studio that prices closer to $1700/month. SEDUs include resident friendly amenities than weren’t available in the first round of micro-housing. Resident lounges, bike parking, roof-top decks and sound insulated floors are becoming more of the market standard. SEDUs now expand further from the city center. I recently toured one of the newest projects in Ravenna, Brooklyn 65, located near the Whole Foods on 65th. The units felt like walking into a display at Ikea. Everything had it’s place and as long as one can stay organized it felt functional.
We've even seen similar, albeit larger properties, in the market. Check out a couple of examples from The Lookout at Pigeon Point, a row of eight townhomes that house 2 beds & baths in 637 square feet over three levels. The latest sold for just under $350k in January of this year.
There are many contributing factors that influence the real estate market locally, regionally and nationally. If you want to learn more about the topics covered in this month's Newsletter, feel free to reach out.
As always, our goal is to partner with you on your real estate decisions, whether buying or selling. We want to stand out in a crowded field by offering friendly & professional service that you can trust. The highest compliment we can receive is when customers recommend us to their friends. We appreciate referrals!
We’ll continue to share more insights into this developing period in the coming months. Stay tuned and don’t forget to reach out and drop us a line - even just to say hello!